Mark Twain once said, “Better a broken promise than none at all.”
If he collected Colonial Americana with that thought in mind, he
probably would have collected early American fiscal paper.
Raising money for state governments was a pretty tough challenge
during the American Revolution. The amount of real money in people’s
hands was severely constrained, and by midway through the war it
became plainly obvious that further issues of paper money were of
little use, since the paper was devaluing more rapidly than it was
For several of the nascent states, the answer was to issue other
kinds of noncirculating fiscal paper. You can call them Treasury
certificates, or warrants, or bonds, but they were pretty much all the
same thing: IOUs that turned out to be little more than broken promises.
Given the problems getting paper money to circulate at a fixed
value during the Revolution, states issued loans as noncirculating
certificates. Since they were payable to the bearer in most cases,
they could pass as a medium of exchange, but they were not designed to
be a circulating medium. Typically, their noncirculating nature meant
that they could be larger and fancier, and thus offer a more
interesting visual treat for modern collectors.
Massachusetts issued the most famous issues, including the
legendary 1775 King Philip bond engraved by Paul Revere and the Sword
in Hand bond of 1777, based on a design by Revere but engraved by
Nathaniel Hurd. Another famous Massachusetts bond issue, the Commodity
Bond of 1780, is best remembered for its unique valuing concept: in an
era of grave inflation, it promised a future value pegged to the value
of various staple commodities like beef, corn, wool and shoe leather —
a literal “basket of goods” long before modern economists starting
using the term!
In the days after the Revolution, speculators developed an active
market for these issues, often combing the countryside to buy them
from destitute veterans who received them in lieu of pay, and then
selling them to the urban rich. This market created the famous
exchange under the Buttonwood Tree in downtown Manhattan, which
evolved into the New York Stock Exchange in 1792. State bonds were
largely converted to federal securities by virtue of the Funding Act
of 1790, part of the compromise that placed the national capital on
The most readily collected Revolutionary era fiscal paper is from
Connecticut. Thanks to a wholesale disposal of the state archives
during the 1960s, thousands of these notes are on the market and can
be collected beginning at prices as low as $50. Massachusetts notes,
far rarer but still widely available, are often priced between $300
and $500. With relatively light competition today, it’s an era of the
market ripe for greater — excuse the puns — interest and appreciation.
John Kraljevich Jr. is an independent professional numismatist and
researcher specializing in early American coinage.